Canva lays off over 1,200 people amid slowing growth
Design software maker Canva is reducing its workforce by 22%, affecting 1,271 employees, amidst a reported slowdown in growth. CEO Melanie Perkins stated in a note to employees that the company's growth has slowed for the first time in a decade, necessitating changes to address current challenges.
Canva's workforce reduction coincides with internal restructuring and financial pressures. The company, which provides accessible design tools, is reorganizing its internal structure by merging its product, growth, and platform teams. This move aims to reduce communication friction, and employees may be asked to take on more responsibilities as part of a reduction in "subspecialisation."
A significant factor in Canva's revised financial outlook is what it termed "ballooning AI costs." While the company has been developing and deploying its own AI models with the goal of reducing costs and reliance on third-party solutions, these investments have apparently led to substantial short-term expenditures. This has contributed to Canva cutting its revenue growth forecast from 30% to 20%, and early investors reducing its valuation to approximately $35 billion earlier this year.
Canva also faces heightened competition from the broader AI landscape. AI startups and general-purpose chatbots, including ChatGPT and Gemini, now offer image generation capabilities that allow users to easily create posters and presentations. This intensifying market competition, coupled with high AI development costs and a general growth slowdown, appears to be driving Canva's current operational adjustments and staff reductions.
